Remains on course to hit financial targets

MADRID — Europe’s biggest entertainment group, Vivendi, is riding out the economic storm, and remains on course to hit its financial targets.

Chief financial officer Philippe Capron told analysts Thursday that he didn’t expect the slowdown to have any significant impact on fourth-quarter biz.

The company reported third-quarter profit fell 13%, but this fall was due to the cost of acquisitions in its phone and vidgame divisions. Adjusted net income fell to Euros 625 million ($781 million) from $901 million a year earlier.

Vivendi’s star-performer in the entertainment sphere remains games subsidiary Activision-Blizzard, where subscriptions to its online role player game “World of Warcraft” have risen to more than 11 million worldwide, up from 10 million at the end of last year.

Universal Music Group boosted revenues 3.5% to $4 billion, but much of the growth was due to the acquisition of BMG Music Publishing and Sanctuary.

Best sellers this year included the debut release from Duffy, the “Mamma Mia!” soundtrack, new releases from Lil’ Wayne and Jack Johnson, and carryover titles from Amy Winehouse and Rihanna.

Business at paybox Canal Plus remains solid, with revenues rising 5% to $4.3 billion, but the group is showing signs of a significant slowdown in net subscriber growth, adding just 40,000 new clients over the last 12 months.

“Canal Plus is being hit by the growth of digital terrestrial television and free-to-air programming packages on pay TV operators,” said Francois Godard, at London-based Enders Analysis.

Vivendi announced a “good performance” for film production-distribution arm StudioCanal, which benefited from the purchase of German distributor Kinowelt and the releases of “Disco,” “Paris” and “The First Day of the Rest of Your Life.”

Vivendi’s resilience during the economic downturn is based in large part on its French telecoms biz, which offers little comfort to those companies focused on entertainment alone. Telco SFR contributed 47% of Vivendi’s Euros17.8 billion ($22.6 billion) 2008 revenues through September.

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